Carbonated Soft Drinks - UK - June 2014

INTRODUCTION
Definition
Excluded
Abbreviations
EXECUTIVE SUMMARY
The market
Figure 1: Forecast of total UK value sales of carbonated soft drinks, 2009-19
Forecast
Market factors
Ongoing negative media focus on sugar and sugary drinks is affecting consumers
The wider use of stevia leaf extract offers scope to quell concerns around sugar and artificial sweeteners
CSD brands are well placed to benefit from the decline in alcohol consumption
The 2014 ‘summer of sport’ offers marketing opportunities to the industry
Companies, brands and innovation
Cola brands continue to dominate CSD value sales in the off-trade
Figure 2: Shares of leading brands in the UK retail carbonated soft drinks market, by value, 2013-14*
Coke leads NPD in 2012
CSD adspend surges in 2013
The consumer
Five in six consumers drink carbonated soft drinks
Figure 3: Usage of carbonated soft drinks, by type, March 2014
Consumption of CSDs peaks in the home
Figure 4: Usage of carbonated soft drinks, by location, March 2014
A quarter of consumers drink fewer CDS than six months ago
Figure 5: Change in use of CSDs, March 2014
Figure 6: Reasons for drinking fewer CSDs, March 2014
Quenching one’s thirst is the most popular reason for drinking CSDs
Figure 7: Reasons for drinking carbonated soft drinks, March 2014
Half of users think that CSDs with less sweet flavours would complement a meal better
Figure 8: Attitudes towards CSDs, March 2014
What we think
ISSUES AND INSIGHTS
CSDs should counter negative health perceptions by doing more to promote the wide availability of lighter variants
The facts
The implications
Pairing CSDs with meals offers growth opportunities
The facts
The implications
Natural ingredients offer a way to trade consumers up
The facts
The implications
TREND APPLICATION
Trend: Guiding Choice
Trend: Patriot Games
Mintel Futures: East Meets West
MARKET DRIVERS
Key points
Slowing growth in the CSD core user group poses challenges for brands
Figure 9: Trends in the age structure of the UK population, 2009-14 and 2014-19
Ongoing negative media focus on sugar and sugary drinks is affecting consumers
Possibility of a sugar tax raised
Brands respond with NPD
The 2014 ‘summer of sport’ including the FIFA World Cup and Glasgow Commonwealth Games offers sales opportunities
The EU’s vote of confidence in aspartame and Coca-Cola’s use of stevia send a positive signal for wider usage in CSDs
Aspartame
Stevia
Sustainability remains a concern to the CSD category
CSD brands are yet to fully realise the opportunity afforded by falling alcohol consumption
Figure 10: Household consumption of alcoholic drinks (in and out of home), 2001-11
STRENGTHS AND WEAKNESSES
Strengths
Weaknesses
WHO’S INNOVATING?
Key points
Coca-Cola leads NPD, fuelled by new packaging innovation
Figure 11: Share of new product launches within the UK CSD market, by ultimate company, 2010-13
Bottlegreen is the latest brand to target the premium mixers market
Sector shows environmental credentials with almost two in three new products featuring eco-friendly packaging
Figure 12: Share of new product launches within the UK CSD market, by top 10 claims, 2010-13
More than one in four new launches bear a low/no/reduced calorie claim
Brands use products to demonstrate their presence on social media channels
Cola’s share of launches declines as other flavours gain ground in 2013
Figure 13: Share of new product launches within the UK CSD market, by flavour (incl. blend), 2010-13
Drinks giants develop a taste for cherry
Botanical flavours offer an opportunity to add value
CSDs seek to mimic flavours typically found in alcoholic drinks
International innovation looks to functionality in CSDs
MARKET SIZE AND FORECAST
Key points
Volume growth is forecast to slow down in the years ahead
Figure 14: UK total value and volume sales of carbonated soft drinks 2009-19
Vagaries of weather see volatile growth in CSDs
Sugar concerns pose a threat to the market
Inflation to drive value growth in the market
Figure 15: Forecast of total UK value sales of carbonated soft drinks, 2009-19
Figure 16: Forecast of total UK volume sales of carbonated soft drinks, 2009-19
Take-home sales are forecast to see only modest growth
Figure 17: UK take-home value and volume sales of carbonated soft drinks 2009-19
On-premise sales may benefit from increasing consumer confidence
Figure 18: UK on-premise value and volume sales of carbonated soft drinks, 2009-19
Forecast methodology
MARKET SEGMENTATION
Key points
Off-trade colas grew volumes ahead of the market
Mixers are the strongest-performing segment by volume in the off-trade
Adult drinks see sharpest increase in off-trade value growth
Figure 19: Off-trade value and volume sales of carbonated soft drinks and adult soft drinks, by type, 2012 and 2013
MARKET SHARE
Key points
Coca-Cola leads the pack with healthy value and volume growth
Figure 20: Leading manufacturers’ shares in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2013/14*
Coke Zero steams ahead
Pepsi Max makes strong gains
AG Barr maintains market share despite phasing out flavours ahead of failed merger
Figure 21: Leading brands in the UK retail carbonated soft drinks and adult soft drinks market, by value, 2012/13 and 2013/14
Figure 22: Leading brands in the take-home carbonated soft drinks and adult soft drinks market, by volume, 2012/13 and 2013/14
Figure 23: Top five manufacturers’ value sales in the UK retail carbonated soft drinks and adult soft drinks market, 2012/13 and 2013/14
Figure 24: Top five manufacturers’ volume sales in the UK retail carbonated soft drinks and adult soft drinks market, 2012/13 and 2013/14
COMPANIES AND PRODUCTS
AG Barr
Background
Recent activity
Product range
Product innovation
Advertising and promotion
Britvic Plc
Background
Product range
Product innovation
Advertising and promotion
Coca-Cola
Background
Product range
Product innovation
Recent activity and promotion
Fentimans
Background
Product range and innovation
Recent activity and promotion
PepsiCo
Background
Product range and product innovation
Recent activity and promotion
SHS Group
Background
Product range
Product innovation
Recent activity and promotion
BRAND COMMUNICATION AND PROMOTION
Key points
Total adspend reaches a four-year high in 2013
Figure 25: Main monitored advertising spend on carbonated soft drinks, 2010-13
Figure 26: Main monitored media advertising expenditure in the UK carbonated soft drinks market, by top 10 advertisers*, 2010-13
Coke extends its dominance
Freedrinks rockets to third place behind Pepsi
Britvic and Schweppes pare back adspend
Figure 27: Main monitored media advertising expenditure* on carbonated soft drinks, by top 10 brands**, 2010-13
Cola brands account for three quarters of total spend
 COCA-COLA
The brand puts calories centre stage in an industry first
Diet Coke celebrates 30th anniversary
2014 sees major campaign for Coke Zero and the World Cup
Coke launches “bigger and better” ‘Share a Coke’ activity for summer 2014
Coke continues to build seasonal relevance
Sprite and Fanta support new products
PepsiCo sees its share of adspend decline in 2013 despite calling on Beyoncé
Pepsi looks to tap into the World Cup
Freedrinks (Zeo) is third only to Coca-Cola and PepsiCo in 2013 adspend
Support for TV boosts advertising to a four-year high
Figure 28: Main monitored media advertising expenditure in the UK carbonated soft drinks market, by media type, 2010-13
Support for cinema advertising sees strong recovery
BRAND RESEARCH
Brand map
Figure 29: Attitudes towards and usage of brands in the carbonated soft drink sector, March 2014
Correspondence analysis
Brand attitudes
Figure 30: Attitudes, by carbonated soft drink brand, March 2014
Brand personality
Figure 31: Carbonated soft drink brand personality – Macro image, March 2014
Figure 32: Carbonated soft drink brand personality – Micro image, March 2014
Brand experience
Figure 33: Carbonated soft drink brand usage, March 2014
Figure 34: Satisfaction with various carbonated soft drink brands, March 2014
Figure 35: Consideration of carbonated soft drink brands, March 2014
Figure 36: Consumer perceptions of current carbonated soft drink brand performance, March 2014
Brand recommendation
Figure 37: Likely recommendation of various carbonated soft drink brands, March 2014
THE CONSUMER – USAGE OF CSDS
Key points
Standard CSDs are drunk by over two thirds of adults
Figure 38: Usage of carbonated soft drinks, by type, March 2014
Standard CSDs remain the more widely drunk type
Half the nation drink light CSDs
Usage of CSDs falls with age
Cola is the most popular type of CSD
One in 10 adults drink lighter CSDs only
Affluent consumers drive consumption of mixers out of home
Half of adults consume CSDs in foodservice/on-trade outlets
Figure 39: Usage of carbonated soft drinks, by location, March 2014
Almost a third drink five or more types of CSDs per month
Figure 40: Repertoire of usage of carbonated soft drinks, by type, March 2014
THE CONSUMER – CHANGES IN USAGE OF CSDS AND REASONS FOR DRINKING LESS
Key points
A quarter of consumers drink fewer CSDs than six months ago
Figure 41: Change in usage of CSDs, March 2014
Half of those drinking fewer CSDs are put off by sugar
Figure 42: Reasons for drinking fewer CSDs, March 2014
A third of consumers who drink fewer CSDs aim to save money
A third of consumers who drink fewer CSDs do so due to worries about artificial sweeteners
Nearly one in six drink fewer CSDs because of health campaigns
THE CONSUMER – REASONS FOR DRINKING CSDS
Key points
CSDs are primarily consumed to quench consumers’ thirst
Figure 43: Reasons for drinking carbonated soft drinks, March 2014
Treat status of CSDs is low compared to other categories
A quarter of adults drink CSDs as an alternative to an alcoholic drink in a pub/bar/restaurant
THE CONSUMER – ATTITUDES TOWARDS CSDS
Key points
Three in five users would like CSDs to be more visible when drinking out
Figure 44: Attitudes towards CSDs, March 2014
Half of users think that CSDs with less sweet flavours would complement a meal better
One in five users like to make their own CSDs at home
THE CONSUMER – FACTORS WHICH ENCOURAGE USERS TO PAY MORE FOR CSDS
Key points
A quarter of users would pay more for a CSD made using only natural ingredients
Figure 45: Factors which would encourage paying more for CSDs, March 2014
British ingredients would be a reason to trade up for one in five users
CSDs with functional benefits could add value to the category
Functional food launches regain momentum
EFSA regulation continues to limit claims
One in 10 users would pay more to customise the flavour of their CSDs
APPENDIX – MARKET SIZE AND FORECAST
Figure 46: Best and worst case forecasts for the total UK carbonated soft drinks market, by value, 2014-19
Figure 47: Best and worst case forecasts for the total UK carbonated soft drinks market, by volume, 2014-19
Figure 48: Best and worst case forecasts for the UK take-home carbonated soft drinks market, by value, 2014-19
Figure 49: Forecast of UK take-home sales of carbonated soft drinks, by value, 2009-19
Figure 50: Best and worst case forecasts for the UK take-home carbonated soft drinks market, by volume, 2014-19
Figure 51: Forecast of UK take-home sales of carbonated soft drinks, by volume, 2009-19
Figure 52: Best and worst case forecasts for the UK on-premise carbonated soft drinks market, by value, 2014-19
Figure 53: Forecast of UK on-premise sales of carbonated soft drinks, by value 2009-19
Figure 54: Best and worst case forecasts for the UK on-premise carbonated soft drinks market, by volume, 2014-19
Figure 55: Forecast of UK on-premise sales of carbonated soft drinks, by volume, 2009-19
APPENDIX – BRAND RESEARCH
Figure 56: Brand usage, March 2014
Figure 57: Brand commitment, March 2014
Figure 58: Brand momentum, March 2014
Figure 59: Brand diversity, March 2014
Figure 60: Brand satisfaction, March 2014
Figure 61: Brand recommendation, March 2014
Figure 62: Brand attitude, March 2014
Figure 63: Brand image – Macro image, March 2014
Figure 64: Brand image – Micro image, March 2014
APPENDIX – THE CONSUMER – USAGE OF CSDS
Figure 65: Usage of carbonated soft drinks, March 2014
Figure 66: Most popular usage of carbonated soft drinks – Any usage, by demographics, March 2014
Figure 67: Next most popular usage of carbonated soft drinks – Any usage, by demographics, March 2014
Figure 68: Other usage of carbonated soft drinks – Any usage, by demographics, March 2014
Figure 69: Least popular usage of carbonated soft drinks – Any usage, by demographics, March 2014
Figure 70: Usage of carbonated soft drinks – Standard cola, by demographics, March 2014
Figure 71: Usage of carbonated soft drinks – Low/no-calorie/diet cola, by demographics, March 2014
Figure 72: Usage of carbonated soft drinks – Standard lemonade, by demographics, March 2014
Figure 73: Usage of carbonated soft drinks – Other standard fruit-flavoured carbonated soft drinks, by demographics, March 2014
Figure 74: Usage of carbonated soft drinks – Low/no-calorie/diet lemonade, by demographics, March 2014
Figure 75: Usage of carbonated soft drinks – Carbonated fruit juice and juice drinks, by demographics, March 2014
Figure 76: Usage of carbonated soft drinks – Mixers, by demographics, March 2014
Figure 77: Usage of carbonated soft drinks – Other low/no-calorie/diet fruit-flavoured carbonated soft drinks, by demographics, March 2014
Figure 78: Usage of carbonated soft drinks – Ginger beer, by demographics, March 2014
Figure 79: Usage of carbonated soft drinks – Other carbonated soft drink, by demographics, March 2014
Figure 80: Repertoire of usage of carbonated soft drinks, by type, March 2014
Figure 81: Repertoire of usage of carbonated soft drinks, by type, by demographics, March 2014
APPENDIX – THE CONSUMER – CHANGES IN USAGE OF CSDS AND REASONS FOR DRINKING LESS
Figure 82: Change in usage of CSDs in the last six months, March 2014
Figure 83: Change in usage of CSDs in the last six months, by demographics, March 2014
Figure 84: Reasons for drinking fewer CSDs, March 2014
Figure 85: Most popular reasons for drinking fewer CSDs, by demographics, March 2014
Figure 86: Next most popular reasons for drinking fewer CSDs, by demographics, March 2014
Figure 87: Other reasons for drinking fewer CSDs, by demographics, March 2014
APPENDIX – THE CONSUMER – REASONS FOR DRINKING CSDS
Figure 88: Reasons for drinking carbonated soft drinks, March 2014
Figure 89: Most popular reasons for drinking carbonated soft drinks, by demographics, March 2014
Figure 90: Next most popular reasons for drinking carbonated soft drinks, by demographics, March 2014
Figure 91: Next most popular reasons for drinking carbonated soft drinks, by demographics, March 2014 (continued)
APPENDIX – THE CONSUMER – ATTITUDES TOWARDS CSDS
Figure 92: Attitudes towards CSDs, March 2014
Figure 93: Agreement with the statement ‘Bars/pubs/restaurants should make carbonated soft drinks more visible to customers’, by demographics, March 2014
Figure 94: Agreement with the statement ‘I would be interested in buying carbonated soft drinks that aid digestion’, by demographics, March 2014
Figure 95: Agreement with the statement ‘I like to check the ingredients on the packaging of carbonated soft drinks’, by demographics, March 2014
Figure 96: Agreement with the statement ‘Carbonated soft drinks with less sweet flavours would complement a meal better’, by demographics, March 2014
Figure 97: Agreement with the statement ‘Carbonated soft drinks which are less fizzy appeal to me’, by demographics, March 2014
Figure 98: Agreement with the statement ‘I’d be interested in buying carbonated soft drinks containing botanical extracts’, by demographics, March 2014
Figure 99: Agreement with the statement ‘Recommendations from friends/family encourage me to try new types of carbonated soft drinks’, by demographics, March 2014
Figure 100: Agreement with the statement ‘I would be interested in buying high-quality mixers to go with spirits in bars/restaurants^’, by demographics, March 2014
Figure 101: Agreement with the statement ‘Most carbonated soft drinks taste too overpowering to drink with a meal’, by demographics, March 2014
Figure 102: Agreement with the statement ‘There are not enough carbonated soft drinks available that use British ingredients’, by demographics, March 2014
Figure 103: Agreement with the statement ‘I would be interested in trying a carbonated soft drink with a thicker texture’, by demographics, March 2014
Figure 104: Agreement with the statement ‘I like to make my own carbonated soft drinks at home’, by demographics, March 2014
APPENDIX – THE CONSUMER – FACTORS WHICH WOULD ENCOURAGE PAYING MORE FOR CSDS
Figure 105: Factors which would encourage paying more for CSDs, March 2014
Figure 106: Most popular factors which would encourage paying more for CSDs, by demographics, March 2014
Figure 107: Next most popular factors which would encourage paying more for CSDs, by demographics, March 2014
Figure 108: Other factors which would encourage paying more for CSDs, by demographics, March 2014